On November 14, 2012 the Kuwait Ministry of Finance announced that Slovakia and Kuwait have signed an agreement on eliminating double taxation and preventing fiscal evasion The agreement has not yet entered into force.
The Ministry stated that the agreement was aimed at removing “financial barriers that may impede movement of capital and commercial exchanges” between the two countries, as well as eliminating double taxation on individuals and funds.
Under the terms of the agreement a construction, assembly or installation project, or related supervisory activities, in the other contracting state amount to a permanent establishment if they continue for at least nine months.
Kuwaiti government investments, government authorities, private enterprises and individuals, are exempted from taxes on dividends. Withholding tax on interest is limited to 10 percent; and a 10 percent withholding tax may be levied on royalties relating to literary, technical and operational rights, patents, trademarks and designs. Some other terms of the agreement address the methods for eliminating double taxation, the mutual agreement procedure and information exchange. The agreement also includes a tax sparing clause providing that where tax is waived or reduced under a special investment incentive law or measure to promote economic development the tax waived is still available as a credit against tax payable in the other contracting state.
